News

Bixby Buy Brings Creative Strategy to Home Turf

Orange County Business Journal

November 17, 2013

By Mark Mueller

Irvine-based Bixby Land Co. is bringing its model for creative office space redevelopment closer to home.

The commercial real estate developer and investor—which has been one of the state’s bigger proponents of turning older office properties into more contemporary spaces over the past two years—recently closed on the purchase of 18231 W. McDurmott, a 45,576-square-foot office building in Irvine.

Terms of the sale were not disclosed. The property was listed for sale at about $7.5 million, according to brokerage records.

A pair of family trusts sold the 28-year-old building, which is on about 3 acres of land near the intersection of the San Diego (405) and Costa Mesa (55) freeways.

Property records show the prior owners of the building having ties to James Irvine, founder of the Irvine Ranch.

The two-story property is set for a multimillion-dollar renovation over the upcoming months, with the goal of turning the building into one of Orange County’s premier creative office spaces.

The highlight of the renovations will be a new outdoor gathering area that will serve as an extension of the collaborative interior spaces, according to the company.

The goal is to create “a true indoor-outdoor connection that takes full advantage of Southern California’s temperate climate,” said Dan Heinfeld, president of Irvine-based architecture firm LPA Inc., which worked with Bixby on the design of the project.

Other features planned for the property include the use of natural and sustainable materials, as well as a newly designed entrance.

Bob Thagard, managing principal at the Irvine-based Orion Property Partners, and John Griffin, executive vice president at the Irvine office of Voit Real Estate Services, are handling leasing for the property.

The plan is to turn the space into an office that will accommodate three tenants of about 15,000 square feet each.

Several Projects

It’s the seventh renovation project Bixby has taken on in the past two years but its first in OC.

The company’s other redevelopment projects have been in the Silicon Valley and Los Angeles areas; those projects—including locations in El Segundo, Torrance and Santa Clara—have totaled about 1.1 million square feet.

Bixby has spent more than $70 million on its various rehab projects, on top of the cost of acquiring the individual properties.

The time is right to bring a similar type of product to the area near John Wayne Airport, according to Bixby Chief Executive Bill Halford.

“There is a great deal of demand for creative office space that has not been met in the local market,” he said.

With the exception of the tech-heavy areas of San Francisco and the Silicon Valley, overall demand for office space in California, including Orange County, is “OK,” according to Halford.

“But if you’re producing the right kind of space, demand is better than most people think,” he said.

Demand for other creative office projects that Bixby has under way are “exceeding expectations,” Halford said.

The trend of redesigning buildings to meet the demands of creative trend uses has become relatively common in tech- and media-heavy markets, such as Silicon Valley, San Francisco and Santa Monica, as well as parts of the Westside in Los Angeles.

The trend has had limited traction in OC, mostly confined to a few design, architecture and development companies.

Fox Head HQ

Bixby’s deal comes a few weeks after one of the area’s first big examples of creative office redevelopment saw a notable sale.

The Irvine headquarters of motocross apparel company Fox Head Inc. was bought by El Segundo-based Griffin Capital Corp. for about $27.3 million.

A venture between Shubin Nadal Associates LLC of Newport Beach and Hartford, Conn.-based Penwood Real Estate Investment Management LLC sold the building. They paid $7.5 million for the property in early 2012 and spent more than $10 million to renovate the 81,600-square-foot office at 16752 Armstrong Ave. to accommodate Fox Head as a long-term tenant.

Fox Head now pays about $1.8 million in rent annually for the property.